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Tuesday, August 2, 2016

Pulse Seismic Inc.

Sound bite for Twitter and StockTwits is: Probably cheap and risky. I would assume that the stock price will not take off again until they announce the reinstatement of dividends. See my spreadsheet on Pulse Seismic Inc.

I do not own this stock of Pulse Seismic Inc. (TSX-PSD, OTC- PLSDF). I wanted to invest some extra money in a dividend paying small cap. I went to the Globe and Mail site of G&M and from Globe Investor section I selected the Stock Filter. I asked for companies that were priced between $1 and $5.50 and had a yield between 4% and 20%. Pulse Seismic Inc. was one of the companies that were returned. This is not a stock I chose to invest in but I found it of interest so I am following it.

The first thing I want to point out is that this company has no long term debt. They paid off all their long term debt in 2014. This company services the resource industry out West. As problems in resources has gone on this company has been increasing their debt ratios. Their Liquidity Ratio for 2014 is 4.44 with a 5 year median of 2.79. The Debt Ratio for 2015 is 5.92 with a 5 year median of 3.06. It is this sort of move from companies that tend to ensure their long term survival.

The other thing is that the company is spending money buying back its stocks. Shares are at a relative low point after the share prices peaked in December 2013. What really counts in buys backs is the decrease in Diluted Shares. For the years of 2012 to 2015, the decreases in diluted shares are at 6.24%, 3.59%, 2.20% and 3.95%.

For this company, the Revenue, EPS and Cash Flow all peaked in 2012 and have been traveling south ever since. The one analyst following this stock does not expect a turn around until 2017. The company was not going to make a profit in 2015 so they stopped the dividends after paying 3 quarterly dividends. Dividends for this company has been an on and off affair ever since they started to pay dividends in 2003.

With the stock price of $2.38, this company is some 51% off its peak price of $4.85, so on that basis the stock price could be looked at as relatively cheap. I would expect that they will reinstate their dividends once they start earning money again.

The stock price looks expensive if you look at Revenues and Cash Flow for 2016. The current P/S Ratio is 8.27 based on Revenues estimates for 2016 of $16M and a stock price of $2.38. The 10 year median P/S Ratio is 2.95 some 180% lower than the current P/S Ratio. Cash Flow for the past 12 months to the end of the second quarter is at $15.4M. The 10 year median P/CF Ratio is 4.69 against a current P/CF Ratio of 8.58 based on a stock price of $2.38.

Even the P/B Ratio stock pricing makes the stock price seem expensive because the 10 year median P/B Ratio is 1.74 against a current P/B Ratio of 3.25 based on BVPS of $$0.73 and a stock price of $2.38. The current P/B Ratio is some 87% above the 10 year ratio. BVPS has been traveling south since 2013.

However, doing this sort of testing does not tell the whole story. You have to look at the stock and if you think that it will recover, which I do by the way. Then looking at the current absolute price of $2.38 you need to figure out if this is relatively low. It probably is.

When I look for analysts' recommendations, all I find is one that the recommendation is for a Hold. The 12 month stock price is $3.00. This implies a total return of 26.05% with capital gains at 26.05% and 0% for dividends.

This company reports on its second quarterly results via Market Wired. Pulse Seismic announced the acquisition of a 2D Seismic data Library via Market Wired .

I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see that report here.

The last stock I wrote about was about was Dorel Industries Inc. (TSX-DII.B, OTC-DIIBF)... learn more . The next stock I will write about will be TECSYS Inc. (TSX-TCS, OTC-TCYSF)... learn more on Wednesday, August 3, 2016 around 5 pm. Today on my other blog I am writing about Dividend Stocks August 2016... learn more .

Pulse Data Inc. is a provider of 2D and 3D seismic library data and is based in Calgary, Alberta. Pulse owns the second-largest licensable seismic data library in western Canada. Pulse's 2D and 3D seismic data library extends over the Western Canada Sedimentary Basin, plus selected areas of the U.S. Rocky Mountains region and northern Canada, with a particular focus on active exploration areas. Its web site is here Pulse Seismic Inc.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

About Me

I haven’t had a main stream job since 1999.
To do this was a two prong attack of controlling spending and earning income.
I exercise, then run each day before breakfast. I read in the morning, then I go to Starbucks for coffee. I work on my computer in the afternoon. Follow me on twitter at http://twitter.com/spbrunner.